Thousands of parents do not understand Tax-Free Childcare

Carried out by the Childcare Voucher Providers Association (CVPA), the survey shows that more than half of respondents (50.5 per cent) feel that they are ‘not well informed’ about Tax-Free Childcare (TFC), while a further 13 per cent have not even heard of the scheme, which went live in April.

As of 16 August, 108,000 parents had successfully signed up to TFC, according to HMRC. This compares to over 780,000 parents currently using childcare vouchers.

A total of 98 per cent of parents said they would like for access to childcare vouchers to be kept open alongside TFC. As of April next year, childcare vouchers will be closed to new entrants.

In light of the findings, the CVPA has renewed its call for the Government to revise plans to close access to vouchers.

A separate CVPA survey of more than 3,000 childcare providers found that 48 per cent had either not heard of TFC or didn’t feel ‘well-informed’ about the scheme. Of the 76 per cent that had registered to offer TFC, 20 per cent said they had experienced issues receiving payments in a ‘timely manner'.

The CVPA also contacted over 350 businesses of all sizes, across the public, private and voluntary sector. Of these, 93 per cent said they wanted childcare vouchers to be kept open alongside Tax-Free Childcare.

Jacquie Mills, chair of the CVPA, said, ‘The roll-out of Tax-Free Childcare has been underway for four months now, and we’re finding low levels of awareness and understanding amongst parents.

‘This is concerning, given the Government’s current plans to close access to the popular childcare vouchers scheme to new entrants from April next year.

‘Tax-Free Childcare’s headline figure of £2,000 savings per year looks generous, but many parents will get far less in reality.

‘It’s important that parents have time to understand Tax-Free Childcare and make an informed decision about whether they would be better off with childcare vouchers.

‘The popularity of childcare vouchers is underscored by our survey finding that 98 per cent of parents would like for access to childcare vouchers to be kept open, alongside Tax-Free Childcare.’

A Treasury spokesperson said, 'Tax-Free Childcare broadens access to childcare support for more working families, including parents whose employer doesn’t offer vouchers and the self-employed who can’t use vouchers. TFC is also fairer, with lone parent households getting the same support as two-parent households. Eligible working families with children under 12 (or under 17 if disabled) will receive up to £2,000 per child per year towards their childcare bills.'